N.C. MarketReady Newsletter
November/December 2009
National Demand Up for Fresh Produce, but N.C. Consumption Falls Short
Despite the current economic conditions and rising costs, consumers are still very interested in fresh fruits. In a 2009 Fresh Trends study conducted by The Packer, a business newspaper for the produce industry, one-third of the consumers who participated said they bought more fresh produce this year than they did a year ago. Forty-two percent of the respondents said their produce purchasing habits remained the same last year, and one-third said they bought more whole produce than fresh-cut in the past 12 months.
In the 2008 Produce Department Annual Review conducted by Produce Merchandising, produce sales were reported to have increased 4.6 percent during the marketing year ending July 26, 2008. Fresh fruit sales accounted for 45.5 percent of these sales, up from 44.8 percent the previous year. Berries led fruit sales, contributing 6.8 percent to the total. Apples made up 6.6 percent, bananas accounted for 5.8 percent and grapes contributed 5.6 percent. Together these fruits represented nearly 25 percent of the total produce sales.
What is driving this increase in fresh fruit sales?
Health Concerns Help Increase Fruit Consumption
First and foremost, health concerns have driven demand for fruits as consumers look for healthier and more nutritious options for their diets. With the increased media attention on obesity and associated health problems, consumers are trying to eat healthier foods, placing an increased focus on items such as fruits, vegetables and whole grains. Health is expected to continue to be a growing factor in consumer buying decisions.
As reported in Healthy Eating Trends 2009, Steve Lutz, vice president of The Perishables Group, West Dundee, Ill., said, “Consumers seem to understand that healthy eating promotes healthy aging. So as consumers age, healthy eating increases in importance.” Fresh fruits and vegetables receive credit from consumers for being unprocessed and natural, Lutz said, and that increases their health appeal.
The demand for berries has especially been influenced by increased consumer awareness of their health benefits because of the many vitamins, minerals, fiber and antioxidants contained in the fruits. Berries are also a quick and healthy snack option, as the only preparation needed is to wash the fruit and eat it. In the United States, fresh blueberry consumption was up 65 percent in 2007, fresh raspberry consumption was up nearly 300 percent and fresh strawberry demand was up 45 percent from 2001 to 2006.
Consumers believe a food is healthy based on these factors: color, seasonality and whether the product is organic, raw and local, according to Healthy Eating Trends 2009. This study also suggests that consumers view farmers markets, health food stores and specialty stores as healthier sources for food than grocery stores and supercenters.
Buying Locally Increases Sales
Some consumers believe that it is important to buy locally grown produce or foods produced in a sustainable environment. The growing trend to eat locally has led to a rising consumer group known as “locavores,” or those consumers who focus on purchasing, preparing and consuming foods grown locally.
Locavores believe that food grown locally will be fresher and therefore more nutritious than food shipped in from distant locations. This trend has induced consumers to shop at farmers markets and local farm stands in increasing numbers. Direct-to-consumer sales increased 104.7 percent from 1997 to 2007, while total agriculture sales grew 47.6 percent, according to Facts on Direct-to-Consumer Food Marketing, May 2009, from the USDA Agricultural Marketing Service. In addition to recognizing the health benefits associated with buying locally grown produce, some advocates, such as Stacy Miller, executive director of the Farmers Market Coalition in Martinsburg, W.V., suggests that consumers are buying more produce from direct markets because “there’s accountability in knowing where your food comes from … some inherent, built-in credibility and traceability.”
The Demographic Shakedown
Demographics also make a major impact on fresh fruit consumption. Adults aged 45 to 54 years spend the most money on fresh fruits, as do consumers in the middle- and upper-income levels, according to Demographics of Consumer Food Spending, 2008. In addition, females typically purchase more fresh fruit than men. Consumers of Asian backgrounds spend the most on fresh fruits, whereas Hispanics spend the second highest amount. Couples with children usually buy more than couples without kids, and consumers who are college graduates spend significantly more than those without a four-year college degree.
Consumers in households with children are more likely to buy apples, grapes and peaches than those without kids; 93 percent to 86 percent, 84 percent to 72 percent, and 63 percent to 51 percent, respectively, according to 2009 Fresh Trends. Income is a driving factor in most berry purchases, however, with the likelihood of a purchase strongly increasing as household income rises. The Fresh Trends study also showed that shoppers in the highest income bracket ($100,000+) comprised the group most likely to buy blackberries, blueberries, raspberries and strawberries while those in the lower income brackets were least likely to buy. In addition, female shoppers were more likely to buy strawberries, at 74 percent, than male shoppers, at 59 percent.
Not surprisingly, older consumers are normally the most receptive to a “healthy eating” message and women place more importance on the consumption of fresh fruits than men and are more likely to adjust their eating habits accordingly, as reported in Meeting Fruit and Vegetable Targets, Datamonitor, June 2005.
Year-round Availability
A greater variety of fruits has also helped to increase the demand for fruit and many Americans shop at supermarkets where there are many different brands of fruits to choose from. In addition, consumers are demanding a variety of produce that is available year-round, especially during off-seasons. Globalization along with improved transportation and cold chain management techniques have helped increase the number of fruit sources from Mexico and countries in the Southern Hemisphere which has enabled consumers to purchase fresh fruit year-round.
In North Carolina, a research team that includes scientists from N.C. State University and the N.C. Department of Agriculture and Consumer Services is studying the use of high tunnels to help farmers extend the growing season for local strawberries.
Convenience continues to play a large role in fruit demand. The average time to prepare a meal has dropped from 49 to 31 minutes over the last decade, according to the 2009 North American Food & Agribusiness Outlook by Rabobank International. As household disposable income increases and free time diminishes, consumers desire more convenient products that frequently command higher prices. According to the Rabobank outlook report, convenience food purchases increased 50 percent in the past decade and fresh-cut produce sales grew almost 170 percent between 1997 and 2006, reaching an estimated $13.4 billion annually.
In the short run, much of the demand for fresh fruits will depend on the economy. In the long run, however, given the growing health concerns, changing demographics and the desire for more variety and convenience, the demand for fresh fruit is expected to increase.
Good News, Bad News for North Carolina
Although consumption has increased, the 2009 State Indicator Report on Fruits and Vegetables from the Centers for Disease Control and Prevention (CDC), shows that Americans still have a ways to go when it comes to eating fruits and vegetables. The objectives of the Healthy People 2010 initiative is for 75 percent of Americans to eat the recommended two or more daily servings of fruit and at least 50 percent to eat the recommended three or more daily servings of vegetables. But the CDC findings show that just 33 percent and 27 percent eat fruits and vegetables respectively. It’s worse for high school students: North Carolina is near the bottom of the list, with only 6 percent of adolescents consuming the daily recommended amounts of fruits and vegetables.
While these numbers are abysmal, they demonstrate a clear need for educational marketing that encourages youth and families to eat their fruits and vegetables.
Guest Contributor: Dr. Charles D. Safley, Professor and Extension Economist, N.C. State University Department ofAgricultural and Resource Economics
New Look, New Name
The Program for Value-Added and Alternative Agriculture has changed its name to N.C. MarketReady. Inherent to the name N.C. MarketReady is the message that our educational
programs help North Carolina producers effectively compete in the marketplace. Market ready, or being ready for market, implies all facets of a business: research, business
planning, production, management, food safety and marketing. Read more at www.ncmarketready.org.
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